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Korea’s out front with digital IDs, but national history could be decisive in success

Korea’s out front with digital IDs, but national history could be decisive in success

There is more to the South Korean government’s apparent backing of a planned self-sovereign digital identity program than meets the eye.

As with other nations, the Covid crisis got political – and, almost as important, military – leaders thinking about the positive aspects of a more fully digital economy, one that includes an electronic ID credential with biometric identifiers.

Heather Vescent, Biometric Update columnist and president of IDPro, a professional digital authentication association, says that what is happening in South Korea has less to do with technology than psychology. By most accounts, the country is more technology-mad than any other in the world.

It differs in other ways, too. Its economy is typified by large and politically active industry-spanning corporations. Korean religion is authoritarian in form. And South Korea has a recent history darkened by dictatorships. Authoritarianism dominated the country through most of the 20th century.

In fact, South Korea was ruled by sometimes brutal dictatorships from the Korean War until the late 1980s, when, after almost 40 years of strongman politics, the nation’s Asian collective culture swung away from top-down obedience.

Authoritarianism in South Korea keeps peeking around the curtain. To this day, the government restricts information flow on the internet.

It might seem surprising then to read an article in business-news publication Bloomberg, that the national government is planning a top-down, although decentralized, blockchain-backed digital ID scheme using mobile devices. They would replace physical cards, the article states. No cost estimates have been made public.

There is a potentially measurable payoff. Digital authentication could bump South Korea’s gross domestic product 3 percent, or 60 trillion wan (US$42 billion) before 2030, according to a quote in the Bloomberg article from the government’s director-general of digital government.

Bloomberg cites figures arrived at by business consultancy McKinsey & Co. showing full digital ID programs in seven specific economies “could unlock economic value equivalent to 3 to 13 percent of GDP in 2030.”

The seven nations were the United States, United Kingdom, China, Ethiopia, Nigeria, Brazil and India. South Korea was not on the list. That is an important point. No nation has accepted and then rejected home-grown dictatorship, organized around corporatism and lived next to an erratic, paranoid nuclear power.

Vescent said that South Korea is unusual in how it has accepted Western democracy and integrated it into its own culture.

In fact, the move to decentralized digital IDs is already in motion. In March 2020, a year when many governments around world started getting the digital government religion, global identity think tank Identity Review issued a report about the nation shifting gears up.

Industry association Decentralize Identity Alliance Korea was formed to get momentum around standardized, interoperable infrastructure not only in South Korea but among its hundreds of trading partners globally.

Also interesting, from a consumer standpoint, Nonghyup Bank is part of (characteristically top-down) industry push for blockchain-backed, decentralized digital authentication.

Nonghyup was hacked in 2011 preventing account withdrawals and transfers. According to Identity Review, the event left an imprint on the society, leading to a public conversation on digital security.

The bank last year debuted mobile ID backed by blockchain for its customers. The system was created by a group of top-shelf companies including Samsung Electronics.

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